Victory Point, a freehold corner mixed-use building relaunched for sale with a guide price of $13.5 million, or approximately $1,270 on GFA
JLL and Brilliance Capital Pte. Ltd. on August 6th jointly presented Victory Point, a freehold corner mixed-use development prominently situated along Balestier Road, at its junction with Ava Road, for sale via public tender.
Held under a single title, Victory Point comprises a 2-storey conservation shophouse with attic and a 6-storey rear apartment block.
Vicotry Point sits within the Balestier Conservation Area on a 3,463 sf site zoned “Commercial & Residential” under the Master Plan 2019 and has an estimated gross floor area (“GFA”) of 10,609 sf.
Balestier, a locale identified by URA as an identity node in 2002 with its many conserved heritage shophouses dated as far back as 1840s and gazetted monuments such as Sun Yat Sun Memorial Hall. Part of its charm is the blend of old and new – the juxtaposition of art deco conservation shophouses and new age buildings, together with their colours, sights, smell and sound. Long established as a popular destination offering a variety of F&B, lifestyle and hospitality services, the area has in recent years undergone a renewal in its residential landscape with modern condominium developments like The Veridian and Verticus amongst others. One development that has added to the rejuvenation of Balestier is Zhongshan Park, a mixed-use development with a premium office tower, and two hotels branded Days Hotel and Ramada Singapore. Within the development is also Zhongshan Mall with more than 58,000 sq ft of retail space and is anchored by FairPrice Finest supermarket.
The development is also strategically located a short distance to HealthCity Novena, an expanding cluster of medical facilities offering world class medical services, including the Lee Kong Chian School of Medicine, Mount Elizabeth (Novena), and Tan Tock Seng Hospital and Medical Centre.
According to Ms Yong Choon Fah, Senior Director, Capital Markets, JLL, “given its prime city fringe location and rare freehold tenure, Victory Point possesses potential for strong capital value and rental upside. The incoming investor can hold the property for stable long-term rental yield or consider the option of a subsequent strata subdivision sale as a potential exit strategy.”
The front conserved section of the property is currently occupied by a 24-hour convenience store on the ground floor, with the second storey and the attic level for office use. The rear residential block houses nine apartments and is being leased to a master tenant. There are also nine mechanised carpark lots within the building. Additional parking spaces are also available at neighbouring developments such as Balestier Point, Balestier Market Food Court and Whampoa Makan Place.
Ms. Sammi Lim, Executive Director, Brilliance Capital, added: “This property is unique; besides location prominence, the 2 levels of commercial space are almost column free, offering contiguous space which is efficient and excellent for layout flexibility. The space would be ideal for showrooms for lifestyle products or service points like medical clinic, pet shop, vet clinic, laundromats,gym or fitness centre. With the growing trend of co-living spaces building strong momentum in Singapore, we have observed existing players seeking spaces for expansion, as well as new operators, both local and from overseas, moving into the co-living sector in Singapore. This property will be attractive to the co-living players as it fulfills the property and location attributes that the operators are seeking.
Although the property market exuberance has been curbed to some extent with the property cooling measures introduced a couple of years ago, the US-China trade tensions and the Covid-19 pandemic, Singapore as a property market investment destination still remains among the top – shoulder to shoulder with other cities in the world like London, New York, Shanghai and Sydney.
“We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for home loans in the region,” he added.
The freehold mixed-use building will be especially attractive to investors because of its location and its freehold status, as investment properties of such nature are scarce in that area. The fact that there is also no ABSD or SSD imposed on the purchase of the property, adds to the attractiveness of the property.
Properties such as Victory Point may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.
To buy a commercial or industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.
Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied though the payoff may be worthwhile for investors.